The howl of pain across the bulk of the press and the old Blairite ascendancy at the election of Ed Miliband as Labour leader has been an object lesson in frustrated establishment entitlement. This was certainly not part of the script, or even the natural order of things. The media had thrown its weight behind his brother David as the continuity candidate and safe pair of hands. So had the New Labour hierarchy.

What Labour narrowly delivered instead was the first significant setback for the party's right wing – as well as the first rebuff by a mainstream party to an unequivocal media leadership endorsement – for a generation. No wonder the Murdoch press is predicting disaster, former ministers have been spitting poison around the Manchester conference bars, rich New Labour donors like Lord Sainsbury have packed up their money bags, and one feverish Tory commentator even accused the upstart Miliband of being to the left of Fidel Castro.

In reality, the new Labour leader is "barely pink", let alone Red Ed, as the Unite union leader, Tony Woodley, remarked. But after his speech to the party conference on Tuesday, there can be no serious doubt that he represents a real change and a significant shift beyond New Labour politics. Not only did he resolutely clear away one piece of discredited Blairite orthodoxy after another, from Iraq to flexible labour markets, he laid out a series of themes that break decisively with the past.

The economy had to be made to work for working people; those who had caused the crisis in the City should pay more; values, not just the US alliance, should drive Britain's foreign policy; community and solidarity trumped the bottom line. David Miliband would have said none of those things if he'd been elected, as was clear enough from the stony faces of former New Labour ministers in the hall as they listened to the most reviled parts of their record being unceremoniously repudiated.

But that is in fact the real centre ground of public opinion, which offers a better clue to why the mild-mannered new leader arouses such anxiety among those in the media and elsewhere who are determined to set the limits of political choice. Far from being a William Hague in the making, they know Ed Miliband could very well be prime minister in five years' time.

And for all the ritual swipe at "overblown rhetoric about irresponsible strikes", he has so far held the course he set during the campaign, despite an onslaught over the backing he has had from the trade union movement. Anything else would of course be a demonstration of weakness and invite further attacks.

The narrowness of Ed Miliband's victory and his reliance on union members' votes has been seized on to challenge his legitimacy – as though the ability to attract the support of tens of thousands of ordinary Labour supporters in a postal ballot should somehow be regarded as a political failure. You might think winning what is effectively a national primary by a total of 175,000 to 147,000-odd votes, more than elected either David Cameron or Nick Clegg, is a perfectly decent result.

But the fact that David Miliband led the field among MPs and local constituency parties – as well as the bizarre invocation of the ancient rights of primogeniture – has fed a Blairite sense of grievance which could yet hobble the newly elected leader's attempt to steer Labour in a new direction.

Despite his initial magnanimity and insistence that this was "Ed's week", the former foreign secretary has dominated coverage of Labour's conference since the weekend by refusing to say whether he would stay or go, as well as by his eruption during his brother's damnation of the Iraq war on Tuesday. His announcement today that he plans to "recharge his batteries", while leaving the door open for a future return to the shadow cabinet, risks making the situation worse.

The danger is now that the elder Miliband becomes a "king over the water" for diehard Blairites, who apparently have no clue why they had lost 4 million votes by 2005 and account for at least 40 members of Labour's parliamentary party. Add a larger group who are also less than ecstatic about the new leader and his dumping of chunks of the last government's record and his problem is clear enough.

Like Margaret Thatcher when she became Tory leader in 1975, Ed Miliband's supporters will be a minority in the new shadow cabinet. He will have to move fast to isolate the Blairite dead-enders, embrace a section of his brother's supporters and impose his authority on frontbenchers such as Alan Johnson, who have been complaining that the new leader is "soft on crime" and heading in the wrong direction.

Ed Miliband showed a streak of ruthlessness when he sacked the veteran Brownite Nick Brown as chief whip, but the organisation around the new leader is barely embryonic, and David Miliband's departure has created a potentially dangerous moment.

That can only be confronted by reinforcing the message of change that was the theme of his campaign. One obvious way to do that would be to give the shadow chancellor brief to Ed Balls, who has shifted the national economic debate by hammering home the threat to the economy from slash-and-burn austerity, ahead of the coalition cuts bonanza due to be unveiled next month.

The importance of consolidating Labour's new course should be clear enough. For all Ed Miliband's studied caution and moderation, his election marks an unmistakable breach in the stifling neoliberal consensus that has dominated British politics since the early 1990s.

That should have happened in the wake of the crash of 2008, but Gordon Brown was unable to turn his government's crisis interventionism into a new agenda – and David Cameron and Nick Clegg have no desire to do any such thing.

Of course this is the new leadership's infancy, Ed Miliband faces serious internal opposition, his commitments are broadest brush, and the devil will be in the policy detail. But by sketching the outlines of a recognisably social democratic agenda the new Labour leader has begun to address the crisis of representation that has gripped mainstream politics for two decades. Turning that into a vehicle for power would, by any reckoning, be a historic breakthrough.